Data Analytics for Accounting by Unknown

Author:Unknown
Language: eng
Format: epub
Published: 2021-09-20T16:00:00+00:00

PROGRESS CHECK

Using Table 6-2 as a guide, compare and contrast descriptive and diagnostic analytics. How might these be used in an audit?

In a continuous audit, how would a dashboard help to communicate audit findings and spur a response?

DESCRIPTIVE ANALYTICS

LO 6-2

Understand basic descriptive audit analyses.

Now that you’ve been given an overview of the types of CAATs and analytics that are commonly used in an audit, we’ll dive a little deeper into how these analytics work and what they generate. Remember that descriptive analytics are useful for sorting and summarizing data to create a baseline for more advanced analytics. These analytics enable auditors to set a baseline or point of reference for their evaluation. For example, if an auditor can identify the median value of a series of transactions, he or she can make a judgment as to how much higher the larger transactions are and whether they represent outliers or exceptions.

page 231

In this and the next few sections, we’ll present some examples of procedures that auditors commonly use to evaluate enterprise data. In these examples, we show the basic process for Excel, including formulas, and IDEA. Note that in the Excel formulas, we identify data elements in [brackets]. To use these formulas, replace the bracketed [data element] with a value or range of values as appropriate. For example, [Aging date] would be replaced with C3 if the data are in column C, row 3.

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